JERUSALEM – Israeli helicopters swooped into Gaza City during a traffic jam yesterday and blew up a car carrying the No. 1 Palestinian terrorist – but there were conflicting claims about his fate.

An Israeli official initially said he was “99.9 percent” certain the missiles killed the shadowy master bombmaker of Hamas, Mohammed Deif.

But Hamas officials said Deif once again cheated death in the raid that killed at least two Hamas members – and Israeli authorities were checking the report.

Deif topped Israel’s most-wanted list – while the Palestinian Authority insisted he wasn’t even in the Mideast.

Last year, Deif came within seconds of being killed when an Israeli helicopter gunship pumped missiles into his car in the Gaza Strip.

But he jumped from the vehicle just before it exploded in a fireball.

Israeli Prime Minister Ariel Sharon was huddling yesterday with his defense Cabinet to review the siege of Yasser Arafat’s compound in Ramallah when word came that Deif finally appeared to have been killed.

Palestinian witnesses said the helicopters swooped into Gaza City’s Sheik Radwan neighborhood and targeted two cars in a traffic jam.

The missiles destroyed one car – scattering parts of two bodies – and damaged the other. One possible survivor of the blast was seen in the wreck of the first car.

Israeli officials said the hunt for Deif accelerated after he succeeded Saleh Shehada as military commander of Hamas two months ago.

When a one-ton bomb destroyed Shehada’s hideout in July, Palestinian officials at first denied he was there at the time – then acknowledged hours later he had been present but only slightly hurt.

Only the following day did Hamas supporters admit he died – and they vowed retaliation.